(1) As used in this section:

1. (a) "Commercial domicile" means the principal place from which the trade or business of a Utah small business corporation is directed or managed.
2. (b) "Eligible claimant, estate, or trust" means the same as that term is defined in Section 63N-2-802.

3. (c) "Life science establishment" means an establishment primarily engaged in the development or manufacture of products in one or more of the following categories:

   1. (i) biotechnologies;
   2. (ii) medical devices;
   3. (iii) medical diagnostics; and
   4. (iv) pharmaceuticals.
4. (d) "Office" means the Governor's Office of Economic Development.
5. (e) "Pass-through entity" means the same as that term is defined in Section 59-10-1402.
6. (f) "Pass-through entity taxpayer" means the same as that term is defined in Section 59-10-1402.

7. (g) "Qualifying ownership interest" means an ownership interest that is:

   1. (i)

      1. (A) common stock;
      2. (B) preferred stock; or
      3. (C) an ownership interest in a pass-through entity;

   2. (ii) originally issued to:

      1. (A) an eligible claimant, estate, or trust; or
      2. (B) a pass-through entity if the eligible claimant, estate, or trust that claims a tax credit under this section was a pass-through entity taxpayer of the pass-through entity on the day on which the qualifying ownership interest was issued and remains a pass-through entity taxpayer of the pass-through entity until the last day of the taxable year for which the eligible claimant, estate, or trust claims a tax credit under this section; and

   3. (iii) issued:

      1. (A) by a Utah small business corporation;
      2. (B) on or after January 1, 2011; and
      3. (C) for money or other property, except for stock or securities.

8. (h)

   1. (i) Except as provided in Subsection (1)(h)(ii), "Utah small business corporation" means the same as that term is defined in Section 59-10-1022.
   2. (ii) For purposes of this section, a corporation under Section 1244(c)(3)(A), Internal Revenue Code, is considered to include a pass-through entity.

(2) Subject to the other provisions of this section, for a taxable year beginning on or after January 1, 2011, an eligible claimant, estate, or trust that holds a tax credit certificate issued to the eligible claimant, estate, or trust in accordance with Section 63N-2-808 for that taxable year may claim a nonrefundable tax credit in an amount up to 35% of the purchase price of a qualifying ownership interest in a Utah small business corporation by the claimant, estate, or trust if:

1. (a) the qualifying ownership interest is issued by a Utah small business corporation that is a life science establishment;
2. (b) the qualifying ownership interest in the Utah small business corporation is purchased for at least $25,000;
3. (c) the eligible claimant, estate, or trust owned less than 30% of the qualifying ownership interest of the Utah small business corporation at the time of the purchase of the qualifying ownership interest; and
4. (d) on each day of the taxable year in which the purchase of the qualifying ownership interest was made, the Utah small business corporation described in Subsection (2)(a) has at least 50% of its employees in the state.

(3) Subject to Subsection (4), the tax credit under Subsection (2):

1. (a) may only be claimed by an eligible claimant, estate, or trust:

   1. (i) for a taxable year for which the eligible claimant, estate, or trust holds a tax credit certificate issued in accordance with Section 63N-2-808; and

   2. (ii) subject to obtaining a tax credit certificate for each taxable year as required by Subsection (3)(a)(i), for a period of three taxable years as follows:

      1. (A) the tax credit in the taxable year in which the purchase of the qualifying ownership interest was made may not exceed 10% of the purchase price of the qualifying ownership interest;
      2. (B) the tax credit in the taxable year after the taxable year described in Subsection (3)(a)(ii)(A) may not exceed 10% of the purchase price of the qualifying ownership interest; and
      3. (C) the tax credit in the taxable year two years after the taxable year described in Subsection (3)(a)(ii)(A) may not exceed 15% of the purchase price of the qualifying ownership interest; and

2. (b) may not exceed the lesser of:

   1. (i) the amount listed on the tax credit certificate issued in accordance with Section 63N-2-808; or
   2. (ii) $350,000 in a taxable year.

(4) An eligible claimant, estate, or trust may not claim a tax credit under this section for a taxable year if the eligible claimant, estate, or trust:

1. (a) has sold any of the qualifying ownership interest during the taxable year; or
2. (b) does not hold a tax credit certificate for that taxable year that is issued to the eligible claimant, estate, or trust by the office in accordance with Section 63N-2-808.